BBI's Drug Discovery Unit established as an independent company,
Receives $3.o Million From Two Venture Capital Firms;
BBI retains a minority interest in panacos
WEST BRIDGEWATER, Mass., Nov. 20 /PRNewswire/ -- Boston Biomedica, Inc. (Nasdaq: BBII) today announced the funding of Panacos Pharmaceuticals, Inc., BBI's drug discovery and therapeutics program, by two venture capital companies: A. M. Pappas & Associates of Durham, North Carolina and Ampersand Ventures of Wellesley, Massachusetts. The transaction establishes Panacos as an independent private company with funding of $3.0 Million in cash from the venture companies in return for 2.7 million shares of the Company's Series B Preferred Stock, representing 54.7% of the Company on a fully diluted basis. Boston Biomedica will retain 1.5 million shares of the Company's Series A Preferred Non-voting Stock, representing 30.5% of the Company on a fully diluted basis. The remaining shares will be held by Panacos's management, Board of Directors, employees and advisors. BBI will hold one of five seats on the Panacos Board of Directors.
Panacos was formed in 1999 with the goal of maximizing the value of BBI's drug discovery and vaccine programs. Richard T. Schumacher, Founder, CEO and Chairman of Boston Biomedica, expressed the belief that Panacos had matured to the point where it was now in the best interests of both BBI shareholders and Panacos to obtain venture capital support to continue the development of Panacos's programs. Mr. Schumacher, commenting on behalf of the BBI Board of Directors, stated that this transaction offers the potential to greatly increase BBI shareholder value because: (a) BBI does not expect to consolidate Panacos's expected future losses into its own financial results, since BBI is now a minority, non-controlling shareholder, (b) as a passive investor, BBI will still share in any increased value of Panacos should the Company be successful in its drug development and vaccine efforts, and (c) BBI can now continue with its publicly-stated plan to refocus efforts on its historically successful core businesses in infectious disease diagnostics and specialty laboratory services.
Commenting further on the equity sale, Mr. Schumacher said: "Boston Biomedica has always recognized the potential that our collaboration with Professor K. H. Lee of the University of North Carolina at Chapel Hill (UNC) has offered in the development of potential therapies against HIV and other viruses. In 1998, the Company chose to greatly accelerate the development of this program concomitant with our other anti-viral and vaccine technologies. The increased expenditures in research and development negatively impacted our profitability, but our development programs have been successful. We are pleased with the technological advances of the past three years, and look forward to the continued growth of these programs through the very capable leadership of Panacos's management and with the support of the impressive scientific and business professionals at A. M. Pappas and Associates and Ampersand Ventures."
A. M. Pappas & Associates (AMP&A) and Ampersand Ventures are venture capital companies dedicated to accelerating the development of companies and products in a number of high technology areas, including the life sciences. Among the previous life sciences investments of AMP&A are Aclara Biosciences, Variagenics, and Arena Pharmaceuticals; Ampersand's portfolio investments also include a number of life sciences companies, such as Aclara Biosciences, CoPharma, and Pentose/VITEX. Pentose/VITEX is an industry leader in applying viral inactivation technologies to provide safer blood products.
Dr. Graham P. Allaway, Panacos's CEO said: "We are very pleased our company has attracted investments from two top tier venture capital investment firms. The new funds will be used to accelerate our drug and vaccine discovery and development programs with the goal of building substantial value for our shareholders, including BBI."
Panacos Pharmaceuticals, Inc., based in Gaithersburg, MD, has three technology platforms. Its lead HIV drug candidates are potent inhibitors of the Human Immunodeficiency Virus (HIV) and have novel mechanisms of action compared to approved drugs. These were discovered through Panacos's Natural Products Platform in collaboration with Professor Lee, Kenan Professor of Medicinal Chemistry and Director of the Natural Products Laboratory at UNC, and are currently in pre-clinical testing. Panacos's Viral Fusion Inhibitor Platform is aimed at identifying novel therapeutics for a variety of medically important viral diseases by targeting the first step in virus infection, fusion to a human cell. The Company's Vaccine Platform utilizes a proprietary approach for the generation of potential vaccines against HIV and other viruses, based on "fusion active regions" of virus surface proteins that are critical to the infection process.
Boston Biomedica, Inc. provides products and services for the detection and treatment of infectious diseases such as AIDS, Lyme Disease, and Viral Hepatitis. The Company has four operating business units: (1) BBI Diagnostics, an ISO 9001 certified manufacturer and supplier of quality control and diagnostics reagents used to increase the accuracy of in vitro diagnostic tests, (2) BBI Clinical Laboratories, a leading specialty infectious diseases testing laboratory, (3) BBI Biotech Research Laboratories, providing R&D support for the other BBI business units as well as contract research services for third parties, and (4) BBI Source Scientific, an ISO 9001 certified manufacturer of laboratory and diagnostic instrumentation. In addition, the Company is pursuing a research and development program in Pressure Cycling Technology (PCT) through its subsidiary BBI BioSeq, with the goal of introducing new solutions for: (a) the inactivation of pathogens in human plasma, (b) the extraction of nucleic acids, (c) the pre-treatment of clinical samples prior to testing to help protect laboratory workers, (d) food safety, and (e) multiple genomics applications -- such as nucleic acid sequence analysis. BBI also maintains a minority, non-controlling and passive investment in Panacos Pharmaceuticals, an antiviral drug and vaccine development company, whose goal is to introduce new solutions for the detection and treatment of infectious diseases.
Statements contained in this news release that state the intentions, hopes, beliefs, expectations or predictions of the future of Boston Biomedica, Panacos or the management of both companies are "forward-looking" statements. It is important to note that Boston Biomedica's or Panacos's actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ from those projected include the possibility that BBI may not be successful in returning its core businesses in infectious diseases diagnostics and specialty lab services to higher levels of profitability; that although BBI has reduced its ownership in Panacos to 30.5%, has retained only non-voting shares, has but one of five seats on the Panacos Board, and does not exert control over Panacos, that it may still be required to consolidate Panacos's financial results in its own, which could adversely affect BBI's financial results; and that Panacos may never be successful in developing any of its products into commercially successful products. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in BBI's SEC filings including, but not limited to, Boston Biomedica's report on Form 10-K for the year ended December 31, 1999 and on Form 10-Q for the periods ended March 31, June 30, and September 30, 2000. Copies of these documents may be obtained by contacting the Boston Biomedica or the SEC.
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CONTACT: Richard T. Schumacher, CEO & Chairman or Kevin W. Quinlan, President & COO, or William R. Prather, M.D., Sr. VP Finance & Business Dvlp. of Boston Biomedica, Inc., 508-580-1900